Latest news with #PropertyCouncilofAustralia
Sky News AU
5 days ago
- Business
- Sky News AU
Melbourne's CBD grapples with near-record office vacancies as state government defends controversial work from home mandate
Melbourne's CBD continues to suffer from the the economic strain of post-pandemic shifts in workplace habits, with fresh data revealing almost 18 per cent of city office spaces remain vacant - the highest of any major city across the country. The figure, released in the Property Council of Australia's latest Office Market Report, shows Melbourne's CBD vacancy rate had ticked down marginally from 18 per cent to 17.9 per cent. However, the slight dip offers little relief as concerns mount over Premier Jacinta Allan's plan to enshrine the right to work from home into state law. The legislation, set to be introduced ahead of next year's election, would grant public and private sector employees the right to work remotely for two days a week, where reasonable. The move has drawn sharp criticism from business leaders who fear it will further erode demand for city office space and deter new investment. 'The reality is that investment to drive jobs, upgrade our office assets, and keep our city vibrant will be deterred from Melbourne if this latest policy comes into effect,' said Property Council Victoria executive director Cath Evans. The policy comes as the national office vacancy rate rises to 15.2 per cent, its highest level in three decades, fuelled by weak demand and a glut of new buildings still coming online after being approved during the low-interest rate boom. In Melbourne, the city is still adjusting to a major shift in workplace culture, with data from CBRE showing just 63 per cent of Victorian workers are returning to the office, well below the national average of 74.7 per cent. In Sydney, office attendance is even higher at 82 per cent. Before the pandemic, Melbourne boasted the lowest vacancy rate in Australia at just 3.4 per cent. But the landscape has drastically changed. By early 2022, vacancy had surged to 13.1 per cent before peaking at 18 per cent, where it remained for a full year. Deputy Premier Ben Carroll defended the government's proposed work from home mandate, saying, 'this really helps all people in all types of industries'. However, Dani Matthews, co-founder of corporate advocacy group Abundium, said the policy would place unnecessary burdens on businesses. 'Our members say it adds unnecessary cost and compliance burden, and for some, it will force a reconsideration of their future footprint in the state,' she told the Herald Sun. Suburban markets are also struggling, with Melbourne's St Kilda Road precinct and Sydney's north shore - areas like Crows Nest - reporting vacancy levels nearing 30 per cent. North Sydney, Macquarie Park, Parramatta and Chatswood are also battling vacancies above 20 per cent. Major new developments in Melbourne, such as Mirvac's 7 Spencer Street and Cbus Property's 435 Bourke Street, anchored by Commonwealth Bank, are expected to test the resilience of the market further as they hit completion in the next three years. Despite the gloom, with the growing market in Melbourne, some remain optimistic. 'There's no doubt that Melbourne is key to the future success of Australia's evolving office market,' Ms Evans said. 'At a time when many other major cities are recording increases in office vacancy, it's encouraging to see that Melbourne's office market is showing green shoots.' The Allan government now faces mounting pressure to reconsider its approach or risk making Melbourne even less competitive on the national stage.
Economic Times
02-08-2025
- Business
- Economic Times
This state in Australia wants to make hybrid work the law
Agencies In a move that has sparked opposition from business groups, the Victorian state government in Australia is preparing to legislate a right to hybrid work. Premier Jacinta Allan announced on Saturday that employees in Victoria may soon have the legal right to work from home at least two days a week. 'This will be a new standard for working life in Victoria. Working from home works for families, and it's good for the economy,' Allan told reporters. 'Workers are more productive. It's saving workers time and money.' The state government will consult with both employer and employee groups over the rest of 2025 before moving ahead with formal legislation. The proposal marks a significant shift in workplace norms as major businesses globally scale back remote work allowances. According to industry data, over half of Fortune 100 companies have ended flexible work models for desk jobs and mandated a full return to office. In Australia, many employers have also encouraged workers to return to physical offices. However, these efforts have had limited impact, especially in Melbourne, where around 20% of office space remained vacant as of January. That figure is higher than the national average and has raised concerns about urban economic slowdown, according to the Property Council of Australia. Despite the trend toward reinstating office attendance, hybrid work remains popular in Australia. Premier Allan's announcement comes ahead of the state election in November 2026. Earlier this year, Australia's federal opposition party dropped its plan to mandate office returns for government workers after facing public backlash, contributing to its election loss. 'If you can do your job from home, we'll make it your right – because we're on your side,' Allan wrote on social media, defending the move. Industry groups have pushed back. Tim Piper, head of the Victorian unit of the Australian Industry Group, said in a statement, 'The proposal is a serious government overreach that undermines business autonomy and further jeopardizes economic confidence in the state.' He added, 'It is little more than pure political theater designed to wedge the state opposition ahead of next year's election.' Legal hurdles may also lie ahead. The Australian Financial Review reported that employment law concerning private businesses falls under the jurisdiction of the federal government. Any new state legislation on hybrid work could face challenges in the country's High Court. Consultations on the proposed law are expected to run through the end of the year. (Join our ETNRI WhatsApp channel for all the latest updates) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Jane St: How an options trader smelt a rat when others raised a toast TCS job cuts may not stop at 12,000; its bench policy threatens more Unlisted dreams, listed disappointments? NSDL's IPO leaves pre-IPO investors riled. Regulators promote exchanges; can they stifle one? Watch IEX Did Meesho's Valmo really deliver a knockout punch to e-commerce logistics? Sebi's settlement with market intermediaries: More mystery than transparency? Trump tantrum: Check the Indian pulse of your portfolio. 71 stocks from 5 sectors for whom Trump may not even be noise F&O Radar| Deploy Short Strangle in Nifty to gain from Theta decay Stock Radar: PI Industries stock showing signs of momentum; takes support above 50-DEMA – time to buy?
Perth Now
29-07-2025
- Business
- Perth Now
'Think twice': Libs warned on anti-build to rent stance
The voice of the Australian property industry is urging the federal coalition to think twice about trying to block the construction of new rental homes. The opposition plans on Wednesday to move a motion in the Senate to halt the Labor government's Build to Rent program, arguing that it's against the national interest because it gives tax advantages to foreign investors. But the Property Council of Australia, which has more than 2300 members, says attempting to block the building of some 80,000 new rental homes in the middle of a housing affordability crisis is wrong. "This is wrecking ball policy," Chief Executive Mike Zorbas said on Wednesday. "The main game, the only game in Australia right now, should be the rapid supply of new housing." The Build to Rent legislation passed the Senate during the last parliament, ahead of Labor being returned to power at the federal election in May. Under the laws that applied from January 1 this year, the rate of withholding tax paid by developers halved from 30 to 15 per cent and the capital works deduction rate rose from 2.5 to four per cent, allowing developers to write off the cost of construction faster. Liberal Senator Andrew Bragg, who is leading the Senate motion, says the program is effectively a "tax cut for foreign investors". "Labor's obsession with foreign landlords and big super taking over Australian housing once again prioritises vested interests over Australia's national interest," he said on Wednesday. "The Australian Dream is about people - not corporations." Under the build to rent model, developers build and retain ownership of properties for rental purposes. The federal government has previously argued that the private market needs to do the heavy lifting to improve affordability and access to homes. Almost one-third of Australian households rent and that number is expected to rise in the years ahead. The government's Build to Rent measure will operate in addition to state and territory initiatives designed to support the Build to Rent sector. Under the legislation, at least 10 per cent of dwellings in a Build to Rent development must be affordable dwellings, which would be rented at 74.9 per cent or less of the market rate and have income thresholds for eligible tenants. The Property Council says build to rent housing offers high-quality, secure, long-term rentals in well-located areas and that the model is used in nations with economies similar to Australia's. But Senator Bragg says the coalition's priority is for Australians of all ages to own their own homes. The coalition's disallowance motion will go the Senate later on Wednesday.
The Advertiser
15-07-2025
- Business
- The Advertiser
Rising cost to build a wake-up call on housing dream
A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said. A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said.
Perth Now
15-07-2025
- Business
- Perth Now
Rising cost to build a wake-up call on housing dream
A rise in construction costs is likely to stoke inflation while pushing home-building targets further out of reach, fresh data analysis suggests. Construction costs rose 0.5 per cent in the June quarter, picking up slightly from a 0.4 per cent rise in the March quarter, according to property analyst Cotality's latest Cordell Construction Cost Index. The re-acceleration is likely to weigh on inflation outcomes because the cost of new dwellings comprises the largest weight in the consumer price index, Cotality research director Tim Lawless said. While noting the increase was half the pre-pandemic decade average of one per cent, Mr Lawless said builders struggle with feasibility assessments amid high material and labour costs. "With the cost of building a new home continuing to rise, the (government's) stretch target of building 1.2 million new homes by July 2029 is looking harder and harder," he said. Property Council of Australia policy and advocacy executive Matthew Kandelaars said the uptick in construction costs "chips away at the feasibility of new housing projects" when the nation needs to be accelerating towards the target of 1.2 million new homes. Better investment and tax settings are needed, Mr Kandelaars said, along with smarter and more efficient approvals and more skilled workers to build the homes. "Without this balance, we'll remain stuck in a doom-loop of low margins, constrained project feasibility, cost blowouts and delivery delays." Independent government advice body the National Housing Supply and Affordability Council warned the federal government in a May report that it would fall short of its 2029 goal by about 300,000 dwellings. Western Australia recorded the largest quarterly increase in construction costs in the three months to June at 0.7 per cent, followed by Victoria (0.6 per cent), NSW and South Australia (0.5 per cent) and Queensland (0.4 per cent). Cotality said the latest data reinforces commentary from the Reserve Bank in its July 8 decision to maintain the cash rate at 3.85 per cent, which highlighted as a concern the re-acceleration of growth in the cost of new dwellings via the monthly CPI indicator. In her rates commentary, the central bank's governor Michele Bullock noted certain components of monthly inflation - particularly home-building costs - had been "slightly stronger than expected", which contributed to the decision to hold rates. The RBA added that high construction expenses continue to exert upward pressure on inflation, reinforcing its cautious stance. Competition for skilled trades also remains intense amid a record level of public infrastructure spending, with Infrastructure Australia forecasting a mismatch between the demand and supply of labour until mid-2028. This means continued inflation pressure is likely from building costs centred on the labour market, Mr Lawless said.
